We Hit the Debt Ceiling
Today is the Big Day. Today is the day that the federal government hits its credit limit. Today, the federal government heads over to Best Buy, piles up a giant cart, heads over to the cash register, hands over its VISA card, slides it through the thingy, and gets....."DENIED."
The federal government is slated to hit the $14.3 trillion debt ceiling today, boosting pressure on the White House to reach a deal with House Republicans to raise that limit. Hitting that ceiling won't immediately affect government finances, notes the AFP, because an unanticipated boost in last month's tax revenues and some short-term adjustments identified by the Treasury will provide about 10 weeks of "wiggle-room," delaying debt default until Aug. 2. In remarks broadcast on CBS, Obama yesterday argued that failing to raise the ceiling will plunge the nation back into recession, reports Reuters.
But the Obama administration has a plan to keep on spending. From WaPo:
The Obama administration will begin to tap federal retiree programs to help fund operations after the government loses its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt.
It's a time-honored technique for deadbeats: get another credit card, and pay the old one with a cash advance from the new one.
Obama, as usual, is getting dramatic:
"Let's not have the kind of linkage where we're even talking about not raising the debt ceiling," said President Obama. "If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system," he warned.
But what are we really talking about, here? How on earth is a default even possible? The debt payment is around $215 billion. Federal revenues are around $2.2 trillion. That's, what, 11%? 12%? The only way we'd default is if we didn't raise the debt ceiling and still refused to cut the federal budget. Or is my math wrong?
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May '10
Re: We Hit the Debt Ceiling
First the tornados, now the debt ceiling! Help! The city is in flames! Zombies stalk the street! The stoplight is blinking! It's too overcast to go to the pool!
Tell my basset I love her. Aiiiiggggghhhh!
Dec '10
Re: We Hit the Debt Ceiling
Without the spending how would they buy the votes necessary to stay in power?
Dec '10
Re: We Hit the Debt Ceiling
Rob, your observation is from the skewed perspective that the mortgage gets paid first, whereas in DC, the mortgage gets paid last, if anything is left over after first buying beer, pizza, and then paying the cable bill.
Feb '11
Re: We Hit the Debt Ceiling
Listening to NPR intone sonorously that the federal government will not be able to pay its bills and is raiding retirement accounts, I can't stop giggling. Not very charitable I know toward the people who are getting the IOUs from the feds, but I can't help myself. I then I hear about the floodwaters along the Mississippi, and I wonder if those people might not be right about May 21 being judgement day...
Edited on May 16, 2011 at 5:34pmOct '10
Re: We Hit the Debt Ceiling
FWIW-I recently went to the web site of the National Bureau of Econonmic Analysis and, according to them, our GDP is about $14.7 trillion. So our national debt is already roughly equal to our GDP, and within a year, it will be about 115% percent of it. This is where Greece's debt-to-gdp ratio was when it began to collapse. So it's amazing that there is so little concern being expressed, even from the US's brain-dead legacy media.
Mar '11
Re: We Hit the Debt Ceiling
Yep, we definitely need to raise that debt ceiling; I hit my head on it when I got up this morning.